The tactic of the Chinese duo is aimed at overtaking market leader Samsung in the next one year in the Rs 6,000-20,000 smartphone segment, which accounts for 78% of the Indian marketWritankar Mukherjee&Shambhavi Anand | ET Bureau | May 03, 2017, 09:51 IST

In India’s mobile-phone advertising sweepstakes, the Chinese seem set to beat their prime rivals based across the East China Sea: Oppo and Vivo, whose billboards lend colour to the Delhi Metro’s beige interiors, would spend about Rs 2,200 crore on marketing this year, dwarfing spends by the Koreans and the Japanese.

A back-of-the-envelope calculation shows that the war chest of the two brands, one of which lends its name to India’s most watched sporting event, would exceed the marketing budget of Samsung, LG, Videocon, and Sony. The proposed spend is part of a strategy that involves expansion of their sales network by 25% through non-conventional stores, such as cellphone recharge and repair outlets, and consumer electronic stores.

The tactic of the Chinese duo is aimed at overtaking market leader Samsung in the next one year in the Rs 6,000-20,000 smartphone segment, which accounts for 78% of the market.

Three senior industry executives said these two smartphone makers have also approached several smaller cellphone stores, asking them to reduce their focus on Samsung smartphones, promising to compensate the potential loss of business.

“Oppo-Vivo are focusing on volume sales, paying retailers upfront for prominent signages and branding for the next 1-2 years and even offering 5-10% more margin to retailers and shopfloor sales promoters,” said a senior executive with a leading cellphone retail chain.

Outdoor advertising firm Laqshya Media chief executive officer Atul Shrivastava said Oppo and Vivo are taking up all outdoor advertising space that is available in the market.

“They are extremely aggressive on the outdoor sites of prestigious brands like Apple and Maruti,” he said.

According to estimates, the two companies are spending more than Rs 20 crore each on outdoor media in large cities and are also expanding the advertisement thrust to smaller towns and rural markets. They are now approaching shops or spots that do not even deal with cellphones.

Hong Kong based market tracker Counterpoint Research says Samsung leads the Rs 10,000-20,000 price segment, with 23% share as of January-March, with Oppo and Vivo closely behind at 20% and 18%, respectively. In the sub-Rs 10,000 segment, Samsung leads with 28% share, followed by Xiaomi (14%), Micromax (10%) and Vivo (8%).

Counterpoint Research analyst Karn Chauhan said Oppo and Vivo are ramping up their distribution presence driven by strong push from their aggressive marketing campaigns.

“Ramping up not just the offline presence but their service network and bringing new features in the product portfolio will be the key to beating Samsung in India,” he said. Oppo has also decided to exit the sub-Rs 10,000 segment to focus on the Rs 10,000-20,000 bracket, while Vivo will focus on Rs 7,000-15,000 segment.

While hitherto both were focused only on offline sales, they have now also started selling from ecommerce marketplaces such as Amazon and Flipkart, industry executives said.While Vivo did not respond to an email, an Oppo spokesperson confirmed the online plans and expansion of the service centre network from 180 centres to 550.

The Oppo spokesperson, however, denied any plans of offering money to retailers to reduce Samsung sales and also did not confirm the marketing budget.